The latest problem involving Hacienda Luisita has brought to the forefront one big issue that has caused societal and economic problems — and bloodshed — in the history of the Philippines. “Land ownership,” the Filipinos’ ultimate dream, has been theexclusive domain of the rich. Truly, “land ownership” separates the rich from the poor — the landed from landless.

“Land ownership” for the rich has its beginning when Miguel Lopez de Legazpi, upon colonizing the Philippines, instituted the Encomienda system. He divided the archipelago into large parcels and assigned each parcel to a favored Spaniard for administration and care. Encomienda, which means “to entrust,” was adopted in Spain to reduce the abuses of forced labor. It was implemented in Spanish America and the Philippines to take care of the economic and spiritual welfare of the natives. However, its benevolent purpose was circumvented and abused by the Spanish grantees — the “encomenderos.” They collected tribute from the natives. Pretty soon the tribute became rents to powerful landlords and the natives became share tenants. In the end, the natives became virtual slaves of the encomenderos. In 1674, the Spanish Crown abolished the Encomienda system in all of its colonies. However, for more than 100 years after its abolition, it remained in effect in the Philippines.

The Encomienda system evolved into the Hacienda system. Land grants were given to the “hacenderos” — “Filipinos” (pure Spanish), mestizos (mixed Spanish and native), and the favored families (the “indio” elite). The hacenderos expanded their influence in all sectors of the economy. They became the political masters, second only to the Spanish masters.

When Spain ceded the Philippines to the United States at the Treaty of Paris in 1898, the Americans were precluded from touching the Friar lands because the treaty bound the US to protect the land owned by religious orders. When Gen. Emilio Aguinaldo established the first republic in 1899, he promised to confiscate large estates particularly the Friar lands. But that did not materialize because he spent his time fighting the Americans until he was captured and forced to pledge allegiance to the new masters.

During the commonwealth period under American colonial rule, the Rural Program Administration, created in March 1939, provided for the purchase and lease of haciendas and their sale and lease to tenants. However, the tenants were so poor, they simply could not buy the land they were farming.

When the Philippines gained its independence from the United States in 1946, the hacenderos had complete control of the economy. They also became the political masters of the new republic. They constituted the new aristocracy and the oligarchy, all bundled into an exclusive class.

The new Philippine government grappled with the problems of land ownership. Numerous agrarian reforms were instituted. During the presidency of Ramon Magsaysay, former HUK dissidents and landless farmers were resettled and given land ownership. His untimely death stopped the program. Subsequent presidents, including Cory Aquino, continued to implement agrarian reforms.

In 1987, a new constitution was adopted. Interestingly, a provision was inserted in the constitution exempting landowning corporations from land reform provided they give out shares of stock to the tenants. In June 1988, President Aquino signed the Comprehensive Agrarian Reform Law (CARL). Under CARL, 10.3 million hectares were targeted to be given away to farmers. At last, the long-awaited land for the landless. However, only 24% of that target were given away. The 76% not given away included the 6,300-hectare Hacienda Luisita owned by President Aquino’s family, the Cojuangcos. According to a newspaper account at that time, “the hacienda is the largest single piece of contiguous land in the Philippines.”

To comply with the special provision of the 1987 constitution, Hacienda Luisita gave away stocks to its farmers… on installment. The catch: until the stocks were fully paid for, the Cojuangco family retained the voting rights; thus, remaining in full control of the hacienda.

In May 1989, a stock distribution option (SDO) — as opposed to outright distribution of land — was agreed upon after a referendum by the farmers approved it overwhelmingly. The SDO would give the farmers 33% of the shares of the corporation, Hacienda Luisita, Inc. (HLI), that will own the land.

In October 2003, the farmers of Hacienda Luisita petitioned the government to revoke the SDO, saying that HLI was not giving them enough dividends and profits. If the SDO is revoked, Hacienda Luisita would be distributed outright to the farmers. On September 23, 2005, a special legal team from the Department of Agrarian Reforms submitted a report recommending the revocation of the SDO. That would mean that the hacienda has to be distributed to the farmers as prescribed by CARL.

A few weeks ago, HLI revealed that portions of Hacienda Luisita was mortgaged to five banks due to losses suffered by HLI. The question is: If the SDO is revoked and the land is distributed to the farmers, who will pay off the mortgage?

After 107 years of the largest land deal between Spain and the United States — $20 million for the “sale” of the Philippine archipelago to the US — land ownership continues to be an issue that divides the rich and the poor… the landed and the landless.